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Having already declined in the months preceding the Middle East conflict, cryptocurrency markets thus far are not reaching new lows this week.
Bitcoin attempts a rally as stocks decline (CoinDesk)
Key points:
- Cryptocurrency markets exhibit a slight degree of relative strength on Tuesday as equity markets experience a steep decline linked to the Iran conflict.
- Bitcoin has regained the $68,000 mark after dropping to nearly $66,000 earlier in the day.
- Having surged to record highs prior to the Middle East conflict, precious metals are now experiencing a downturn alongside the stock market.
Yesterday’s small uptick in stocks in reaction to the outbreak of a new Middle East war over the weekend — for now — seems to have been misleading.
During mid-morning U.S. trading hours, the Nasdaq is at session lows, down 2.5%. The S&P 500 has decreased by 2.3%. European markets are facing even steeper declines, spearheaded by a 5.2% drop in Italy’s IBEX 35 and a 4.1% decrease in Germany’s DAX.
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Having surged to historic highs in the weeks leading up to the war, precious metals are also declining. Gold is down 4.3%, silver by 7.5%, and platinum by 11.3%. WTI crude oil continues to rise, up another 8% to $77 per barrel.
Despite a persistent decline over the last five months, cryptocurrency markets are showing a slight amount of relative strength. Trading at $68,000, bitcoin is down 1% in the past 24 hours but has risen over 2% from its lowest points of the day.
Also experiencing declines over the past day, but showing an improvement from the session’s lowest levels are ether (ETH), solana (SOL), and XRP (XRP).
However, no rebound has yet occurred in crypto-related stocks, which are still under significant selling pressure on Tuesday.
Shares of trading platform Robinhood (HOOD) fell by 7%, while Coinbase (COIN) saw a 5% drop. MicroStrategy (MSTR) and crypto platform Bullish (BLSH) each decreased by 4%. Stablecoin issuer Circle (CRCL) performed slightly better but still dropped around 1%.
"Historically, bitcoin, as the only liquid asset that also trades on weekends, has absorbed shocks during periods of forced risk reduction," noted James Butterfill, head of research at CoinShares. "This time, the price movement was constructive; bitcoin appreciated despite the rising instability … This divergence is noteworthy. The lack of significant liquidations amid increasing yields and geopolitical tensions indicates that positioning has been adjusted compared to previous instances."
